Pellet fuels (or pellets) are a type of solid fuel made from compressed organic material. Pellets can be made from any one of five general categories of biomass: industrial waste and co-products, food waste, Crop residue, , and untreated lumber. Wood pellets are the most common type of pellet fuel and are generally made from compacted sawdust and related industrial wastes from the Lumber mill of lumber, manufacture of wood products and furniture, and construction. Other industrial waste sources include empty fruit bunches, palm kernel shells, coconut shells, and tree tops and branches discarded during logging operations. So-called "black pellets" are made of biomass, refined to resemble hard coal and were developed to be used in existing coal-fired Power station. Pellets are categorized by their heating value, moisture and Wood ash content, and dimensions. They can be used as fuels for power generation, commercial or residential heating, and cooking.
Pellets are extremely dense and can be produced with a low moisture content (below 10%) that allows them to be burned with a very high combustion efficiency. Further, their regular geometry and small size allow automatic feeding with very fine calibration. They can be fed to a burner by Screw conveyor feeding or by Pneumatics conveying. Their high density also permits compact storage and transport over long distance. They can be conveniently blown from a tanker to a storage bunker or silo on a customer's premises.
A broad range of , central heating furnaces, and other heating appliances have been developed and marketed since the mid-1980s. With the surge in the price of since 2005, the demand for pellet heating has increased in Europe and North America, and a sizable industry is emerging. According to the International Energy Agency Task 40, wood pellet production has more than doubled between 2006 and 2010 to over 14 million tons. In a 2012 report, the Biomass Energy Resource Center says that it expects wood pellet production in North America to double again in the next five years.
Pellets can be made from grass and other non-woody forms of biomass that do not contain lignin. A 2005 news story from Cornell University News suggested that grass pellet production was more advanced in Europe than North America. It suggested the benefits of grass as a feedstock included its short growing time (70 days), and ease of cultivation and processing. The story quoted Jerry Cherney, an agriculture professor at the school, stating that grasses produce 96% of the heat of wood and that "any mixture of grasses can be used, cut in mid- to late summer, left in the field to leach out minerals, then baled and pelleted. Drying of the hay is not required for pelleting, making the cost of processing less than with wood pelleting." In 2012, the Department of Agriculture of Nova Scotia announced as a demonstration project conversion of an oil-fired boiler to grass pellets at a research facility.
Rice-husk fuel-pellets are made by compacting rice-husk obtained as by-product of rice-growing from the fields. It also has similar characteristics to the wood-pellets and more environment-friendly, as the raw material is a Waste. The energy content is about 4-4.2 kcal/kg and moisture content is typically less than 10%. The size of pellets is generally kept to be about 6 mm diameter and 25 mm length in the form of a cylinder; though larger cylinder or briquette forms are not uncommon. It is much cheaper than similar energy-pellets and can be compacted/manufactured from the husk at the farm itself, using cheap machinery. They generally are more environment-friendly as compared to wood-pellets.  In the regions of the world where wheat is the predominant food-crop, wheat husk can also be compacted to produce energy-pellets, with characteristics similar to rice-husk pellets.
A report by CORRIM (Consortium On Research on Renewable Industrial Material) for the Life-Cycle Inventory of Wood Pellet Manufacturing and Utilization estimates the energy required to dry, pelletize and transport pellets is less than 11% of the energy content of the pellets if using pre-dried industrial wood waste. If the pellets are made directly from forest material, it takes up to 18% of the energy to dry the wood and additional 8% for transportation and manufacturing energy. An environmental impact assessment of exported wood pellets by the Department of Chemical and Mineral Engineering, University of Bologna, Italy and the Clean Energy Research Centre, at the University of British Columbia, published in 2009, concluded that the energy consumed to ship Canadian wood pellets from Vancouver to Stockholm (15,500 km via the Panama Canal), is about 14% of the total energy content of the wood pellets.
Pellets conforming to the European standards norms which contain recycled wood or outside contaminants are considered Class B pellets. Recycling such as particle board, treated or painted wood, melamine resin-coated panels and the like are particularly unsuitable for use in pellets, since they may produce noxious Air pollution and uncontrolled variations in the burning characteristics of the pellets.
Standards used in the United States are different, developed by the Pellet Fuels Institute and, as in Europe, are not mandatory. Still, many manufacturers comply, as warranties of US-manufactured or imported combustion equipment may not cover damage by pellets non-conformant with regulations. Prices for US pellets surged during the fossil fuel price inflation of 2007–2008, but later dropped markedly and are generally lower on a price per energy amount basis than most fossil fuels, excluding coal.
Regulatory agencies in Europe and North America are in the process of tightening the emissions standards for all forms of wood heat, including wood pellets and pellet stoves. These standards will become mandatory, with independently certified testing to ensure compliance. In the United States, the new rules initiated in 2009 have completed the EPA regulatory review process, with final new rules issued for comment on June 24, 2014. The American Lumber Standard Committee will be the independent certification agency for the new pellet standards.
When handled, wood pellets give off fine dust which can cause serious dust explosions.
Wood pellets are typically stored in bulk in large silos. Pellets may self-heat, ignite and give rise to a deep-seated smoldering fire that is very difficult to extinguish. The smoldering fire produces toxic carbon monoxide and flammable pyrolysis gases that can lead to silo explosions.
Pellet stoves work like modern furnaces, where fuel, wood, or other biomass pellets, is stored in a storage bin called a hopper. The hopper can be located on the top of the appliance, the side of it or remotely. A mechanical auger automatically feeds pellets into a burn pot. From there, they burn at high temperatures with minimal emissions. Heat-exchange tubes send air heated by fire into room. Convection fans circulate air through heat-exchange tubes and into room. Pellet stoves have circuit boards inside that act like a thermostat and to regulate temperature.
Pellet boilers are standalone central heating and hot water systems designed to replace traditional fossil fuel systems in residential, commercial and institutional applications. Automatic or auto-pellet boilers include silos for bulk storage of pellets, a fuel delivery system that moves the fuel from the silo to the hopper, a logic controller to regulate temperature across multiple heating zones and an automated ash removal system for long-term automated operations.
Pellet baskets allow one to heat one's home using pellets in existing stoves or fireplaces.
High-efficiency wood pellet stoves and boilers have been developed in recent years, typically offering combustion efficiencies of over 85%. The newest generation of wood pellet boilers can work in condensing mode and therefore achieve 12% higher efficiency values. Wood pellet boilers have limited control over the rate and presence of combustion compared to liquid or gaseous-fired systems; however, for this reason they are better suited for hydronic heating systems due to the hydronic system's greater ability to store heat. Pellet burners capable of being retrofitted to oil-burning boilers are also available.
A report in 2010 concluded that burning biomass such as wood pellets or wood chips releases a large amount of into the air, creating a "carbon debt" that is not retired for 20–25 years and after which there is a net benefit. Others have disputed this conclusions, and scientists have pointed out oversights in the report, suggesting that climate impacts are worse than reported.
Until around 2008 it was commonly assumed, even in scientific papers, that biomass energy (including from wood pellets) is carbon neutral, largely because regrowth of vegetation was believed to recapture and store the carbon that is emitted to the air. Then, scientific papers studying the climate implications of biomass began to appear which refuted the simplistic assumption of its carbon neutrality. According to the Biomass Energy Resource Center, the assumption of carbon neutrality "has shifted to a recognition that the carbon implications of biomass depend on how the fuel is harvested, from what forest types, what kinds of forest management are applied, and how biomass is used over time and across the landscape."
Per the New Hampshire Office of Energy and Planning release on Fuel Prices updated on 5 Oct 2015, the cost of #2 fuel oil delivered can be compared to the cost of Bulk Delivered Wood Fuel Pellets using their BTU equivalent: 1 ton pellets = 118.97 gallon of #2 Fuel Oil. This assumes that one ton of pellets produces 16,500,000 BTU and one gallon of #2 Fuel Oil produces 138,690 BTU. Thus if #2 Fuel Oil delivered costs $1.90/Gal, the breakeven price for pellets is $238.00/Ton delivered.
|+EU pellet use (tons) in 2013
|4 540 000
|3 300 000
|2 500 000
|2 000 000
|1 650 000
|1 600 000
|1 320 000
Usage across Europe varies due to government regulations. In the Netherlands, Belgium, and the United Kingdom, pellets are used mainly in large-scale power plants. The UK's largest power plant, the Drax power station, converted some of its units to pellet burners starting in 2012; by 2015 Drax had made the UK the largest recipient of exports of wood pellets from the US. In Denmark and Sweden, pellets are used in large-scale power plants, medium-scale district heating systems, and small-scale residential heat. In Germany, Austria, Italy, and France, pellets are used mostly for small-scale residential and industrial heat.
The UK has initiated a grant scheme called the Renewable Heat Incentive (RHI) allowing non-domestic and domestic wood pellet boiler installations to receive payments over a period of between 7 and 20 years. It is the first such scheme in the world and aims to increase the amount of renewable energy generated in the UK, in line with European Union commitments. Scotland and Northern Ireland have separate but similar schemes. From Spring 2015, any biomass owners—whether domestic or commercial—must buy their fuels from BSL (Biomass Suppliers List) approved suppliers in order to receive RHI payments. The Renewable Heat Incentive scandal also referred to as the "cash for ash scandal", was a political scandal in Northern Ireland that centred on a failed renewable energy (wood pellet burning) incentive scheme.
Pellets are widely used in Sweden, the main pellet producer in Europe, mainly as an alternative to oil-fired central heating. In Austria, the leading market for pellet central heating furnaces (relative to its population), it is estimated that 2/3 of all new domestic heating furnaces are pellet burners. In Italy, a large market for automatically fed pellet stoves has developed. Italy's main usage for pellets is small-scale private residential and industrial boilers for heating.
In 2014 in Germany, the overall wood pellet consumption per year comprised 2,2 million tonnes. These pellets are consumed predominantly by residential small-scale heating sector. The co-firing plants which use pellet sector for energy production are not widespread in the country. The largest amount of wood pellets is certified with DINplus, and these are the pellets of the highest quality. As a rule, the pellets of lower quality are exported.
As early as 1997 a fully automatic wood with similar comfort level as oil and gas boilers became available in Austria.
In Thailand, rice husk pellets are being produced for animal bedding. They have a high absorption rate which makes them ideal for the purpose.